I was looking into that...but it said that the Madres are blacked out as I'm in SD. Does the thing work similar to television in that only the home games are blacked out?

Check the very bottom of the page:

MLB.TV LIVE BLACKOUT RESTRICTIONS
All live and archive games are subject to blackout and other restrictions. Please read the below information before you sign up.

• Local Live Blackout: ALL LIVE MLB.TV games will be blacked out in each applicable Club's home television territory (except for certain home television territories for which MLB.com may offer in-market subscription services) or in Japan.
• Am I in a Local Live Blackout region? Check by club: If your zip code is on the list, you cannot watch the game live. (But you can watch the archive.)
Select a team Angels Astros Athletics Blue Jays Braves Brewers Cardinals Cubs Devil Rays Diamondbacks Dodgers Giants Indians Mariners Marlins Mets Nationals Orioles Padres Phillies Pirates Rangers Red Sox Reds Rockies Royals Tigers Twins White Sox Yankees

• National Live Blackout (Regular Season): Due to Major League Baseball national exclusivities, scheduled webcasts of certain games during the regular season (including nationally televised games) will be blacked out. Please be sure to visit the Multimedia Guide during the 2007 MLB season for complete and updated schedule information.
• National Live Blackout (Post Season): Due to Major League Baseball national exclusivities, during the MLB postseason, if you live within the following nations or territories, webcasts of all postseason games will be blacked out: United States, Canada, Guam, US Virgin Islands, South Korea and Japan. Please be sure to visit the Multimedia Guide during the 2007 MLB season for complete and updated schedule information.
• NOTE: Due to broadcast restrictions, new MLB.TV and Condensed Game archives are limited to a playing time of five minutes in duration until 6 am ET on the day following that on which the applicable game commenced play.